MARITIME INSIGHT

C.Y.C.Y.C.Y.C.Y. TungTungTungTung InternationalInternationalInternationalInternational CentreCentreCentreCentre forforforfor MaritimeMaritimeMaritimeMaritime StudiesStudiesStudiesStudies

MaritimeMaritimeMaritimeMaritime Education | Research | Consultancy

June 2013

Topics· Transport safety· Maritime security· Environmental management

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Preface

OneOneOneOne stepstepstepstep back,back,back,back, twotwotwotwo stepsstepsstepssteps forwardforwardforwardforwardNow especially, the maritime industry needs to sail its way under the direction of both industrial players’interests and public concerns. The truth is that the two aspects could be combined so that industrial players arepotentially gaining more from pursuing solutions which consider public concerns. Port safety, maritime securityand environmental issues are increasingly appearing as both public concerns and corporate socialresponsibilities. Maritime related environmental management and safety control will contribute to sustainableinternational trade and the global supply chain. The ICMS MARITIME INSIGHT in June endeavours tosummarise new efforts that are being done and to bring forward topics for further discussions in academicresearch.

WhenWhenWhenWhen transporttransporttransporttransport safetysafetysafetysafety succeeds,succeeds,succeeds,succeeds,sssshippinghippinghippinghipping efficiencyefficiencyefficiencyefficiency flourishes.flourishes.flourishes.flourishes.

HowHowHowHow farfarfarfar areareareare wewewewe goinggoinggoinggoing inininin regardsregardsregardsregards totototo safety,safety,safety,safety, atatatat thethethethe port,port,port,port, onononon boardboardboardboard andandandand abroad?abroad?abroad?abroad? DoesDoesDoesDoes improvingimprovingimprovingimproving safetysafetysafetysafety makemakemakemakesensesensesensesense andandandand doesdoesdoesdoes itititit makemakemakemake aaaa differencedifferencedifferencedifference totototo shippingshippingshippingshipping efficiency?efficiency?efficiency?efficiency? HumanHumanHumanHuman behaviourbehaviourbehaviourbehaviour maymaymaymay havehavehavehave thethethethe finalfinalfinalfinal say.say.say.say.

Port safety and maritime security have been attracting increasing public concerns. A recent example of such acase was the accident which happened at Genoa port causing 7 deaths, 2 missing after the Ship slammed intothe dock, toppling the control tower into the harbour. Once again, passionate discussions about port safetywould continue.As is obvious that the oceans and sea yield vast revenueseach year and are economically indispensable for thosewho live in the maritime zones. However, they could alsobe the source of dangers threatening the security ofinternational trade and the global supply chain. Dangersin international shipping and maritime range from piracyviolence (Wong and Yip, 2012), to port disruption onsupply chains (Lam and Yip, 2012), and port traffic risks(Yip, 2008). More in depth research into the effects ofnational culture on human failures in container shippingempirically was examined by Lu et al. (2012). This set ofarticles reflects the contemporary maritime securityproblems which are consistent with three main maritimesecurity activities, namely, port security, vessel security and marine security (Source: Wikipedia).

In a way different from previous analyses which have ignored near-miss attacks, Wong and Yip(2012) attempted to consider maritime piracy within the framework of safety with ‘piracy attacks’being viewed as unwanted events like other maritime accidents and then to quantify aspects of thesuccess or failure of maritime piracy. Binary models were used to quantify how piracy characteristics

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and behaviour determine the rate of success and degree of violence of piracy attacks. Three majorapproaches of pirate attacks were identified based on empirical data. Pirates committing low-levelviolence prefer to take items that allow them to get in and out quickly, these pirates are generally notwell organized or well trained. Pirates committing major violence are well-armed and organised withautomatic weapons to target the people, the cargo and the vessel when the vessels are steaming. Amulti-layer defence strategy against pirates of different levels is recommended.

ORTORTORTORT disruptiondisruptiondisruptiondisruption totototo supplysupplysupplysupply chainchainchainchainssss isisisis maritimemaritimemaritimemaritime piracypiracypiracypiracy totototo internationalinternationalinternationalinternational shipping.shipping.shipping.shipping. AnyAnyAnyAnydisruptionsdisruptionsdisruptionsdisruptions happenhappenhappenhappeninginginging atatatat aaaa portportportport maymaymaymay havehavehavehave aaaa greatgreatgreatgreat impactimpactimpactimpact onononon thethethethe effectiveeffectiveeffectiveeffective andandandand efficientefficientefficientefficient

managementmanagementmanagementmanagement ofofofof flowsflowsflowsflows ofofofof cargocargocargocargo inininin thethethethe supplysupplysupplysupply chain.chain.chain.chain. There are not much literatures talking about portdisruptions and risk management. Lam andYip (2012) argued that any possible portdisruption, such as equipment breakdown,electrical outages and industrial accidents,could all result in a collapse of the wholesupply chain system. Gurning and Cahoon(2011) analysed multiple mitigation strategiesfor managing maritime disruptions in thewheat supply chain. But the authors did notspecifically study how disruption affects the various stages and parties in a supply chain. Lam and Yip(2012) applied the Petri Net in analysing the impact of port disruption on supply chains and the partiesinvolved, in a way which can better accommodate complex systems compared to Markov Chain usedby Gurning and Cahoon (2011). The approach could also estimate the impact of the recent labourstrike at container terminals in Hong Kong.

To enhance port efficiency as well assecurity whilst reducing port accidents, Yip(2008) investigated port traffic risk issues by discussing historic accidents in the Hong Kong port.Search findings identified factors that can contribute to reducing the security level of port accidents.The port of registration, vessel types and the accident type are critical to the number of injuries andfatalities. It was found that port traffic risks follow certain pattern. CollisionCollisionCollisionCollision accidentsaccidentsaccidentsaccidents mostlymostlymostlymostlyhappenhappenhappenhappen whenwhenwhenwhen portportportport traffictraffictraffictraffic isisisis heavy.heavy.heavy.heavy. Passenger-typePassenger-typePassenger-typePassenger-type vesselsvesselsvesselsvessels havehavehavehave higherhigherhigherhigher potentialpotentialpotentialpotential forforforfor injuriesinjuriesinjuriesinjuriesduringduringduringduring accidents.accidents.accidents.accidents.

hehehehe endeavoendeavoendeavoendeavouuuursrsrsrs totototo ensureensureensureensure transporttransporttransporttransport safetysafetysafetysafety andandandand maritimemaritimemaritimemaritime securitysecuritysecuritysecurity maymaymaymay havehavehavehave aaaa nexusnexusnexusnexus withwithwithwithhumanhumanhumanhuman behaviourbehaviourbehaviourbehaviour notnotnotnot onlyonlyonlyonly atatatat seaportsseaportsseaportsseaports butbutbutbut alsoalsoalsoalso onononon board.board.board.board. The emergency of multinational

crews drawn from different countries working on the same ship has important implications for safetyin international safe ship operations. Based on five dimensions of national culture construct, Lu et al.(2012) evaluated seafarers’ perception of the five dimensions, power distance,collectivism/individualism, uncertainty avoidance, masculinity/femininity and Confucian dynamism,each of which seems to be related to a different degree of human failures in ship operations. Forexample, low power distance might be good for work safety. With this understanding, effective actionplans could be developed to reduce human failure in vessel management.

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PetriPetriPetriPetri NetNetNetNet MethodMethodMethodMethod

The concept of Petri Net is originally developed byCarl Adam Petri (1962) as a general purposemathematical tool for the study of communication withautomata. Petri Net method is characterised by itsability to model and visualise the properties of complexsystems such as process synchronisation, asynchronousevents, concurrent operations and conflicts or resourcesharing (Zurawski and Zhou, 1994).

TheTheTheThe PatternPatternPatternPattern ofofofof HongHongHongHong KongKongKongKong PortPortPortPort TrafficTrafficTrafficTraffic RiskRiskRiskRisk

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WorthWorthWorthWorth waitingwaitingwaitingwaiting for?for?for?for? TheTheTheThe globalglobalglobalglobal riseriseriserise ofofofof maritimemaritimemaritimemaritimerelatedrelatedrelatedrelated environmentalenvironmentalenvironmentalenvironmental awarenessawarenessawarenessawarenessToday,Today,Today,Today, whatwhatwhatwhat reallyreallyreallyreally mattersmattersmattersmatters inininin thethethethe ShippingShippingShippingShipping Industry?Industry?Industry?Industry? Ports,Ports,Ports,Ports, VesselsVesselsVesselsVessels andandandand ContainersContainersContainersContainers areareareare candidates.candidates.candidates.candidates. TheTheTheThebestbestbestbest answeransweransweranswer maymaymaymay be:be:be:be: thethethethe shippingshippingshippingshipping activitiesactivitiesactivitiesactivities relatedrelatedrelatedrelated environmentalenvironmentalenvironmentalenvironmental management.management.management.management.

In support of the continued world trade and international shipping activities, practices and concerns againstenvironmental issues are increasingly embraced by shipping industries. As were massively and extensivelydiscussed during the fifth International Forum onShipping, Ports and Airports (IFSPA) held in 2012 inHong Kong, topics about sustainable growth anddevelopment, sustainable supply chain management andsustainable performance in international ports, greenshipping practices and environmental efficiency of portsaccounted for a large proportion of the papers publishedin the conference proceedings (Yip et al. 2012). On theone hand, the good news is that over the past few years,we’ve seen the increasing awareness of theenvironmental side of shipping activities. On the otherhand, measures for evaluating environmental management performance in the shipping industry, such as greenshipping practices, did not exist when searching literature before 2010. Measurements are yet to be developed,implemented and empirically examined. This set of articles was selected by ICMS in order to offer somemeasuring and management implications, focusing on topics ranging from the conceptualisation of greenshipping practices (Lai et al. 2011), to an evaluation of green shipping networks to minimise external costs inthe Pearl River Delta region (Lun et al. 2012), to measures for evaluating green shipping practicesimplementation (Lai and Lun 2013), and to regional cooperation and management of port pollution(Homsombat et al. 2013).

he green shipping practices (GSPs) were initially brought about and defined as a conception byLai et al. (2011) of the Shipping Research Centre

(SRC), The Hong Kong Polytechnic University. GSPsare environmental management practices undertaken by shipping firms with an emphasis on wastereduction and resource conservation in handling and distribution. There are potential gains frompursuing environmental protection by improving shipping activities proposed by Lai et al. (2011). A.P.Moller-Maersk Group (Maersk) was taken as a case to illustrate six dimensions of GSPs and this canhelp to conceptualise GSPs. A set of testable propositions was developed to examine the antecedentsand consequences of adopting GSPs from the institutional theoretic perspective.

TTTT TakeTakeTakeTakeGreenGreenGreenGreen totototo ShippingShippingShippingShipping PracticesPracticesPracticesPractices

(Photography: Fang Zhang, 2013)

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SixSixSixSix dimensionsdimensionsdimensionsdimensions ofofofof GSPsGSPsGSPsGSPs andandandand fourfourfourfour propositionspropositionspropositionspropositions ofofofof adoptingadoptingadoptingadopting GSPsGSPsGSPsGSPs

Six dimensions of GSPs

(1) Company policy and procedure(2) Shipping Documentation(3) Shipping equipment(4) Shipper cooperation(5) Shipping materials(6) Shipping design and compliance

Four propositions ofadopting GSPs

(1) When shipping firms encounter strongly enforced regulatoryenvironmental requirements

(2) When shipping firms exposed to industrial institutionalized norms onenvironmental protection

(3) When shipping firms facing strong environmental request from customersShipping firms will attain both environmental and productivityperformance gains

(Source: Lai et al. 2011)

s a further step and endeavour to evaluate the environmental damage caused by shipping-relatedactivities, Lun et al. (2013) of SRC, evaluated the external cost incurred from barge and

containership usage in the Pearl River Delta (PRD) region and, based on this external cost, determinethe environmental damage caused by container shipping activities in the region. Ports in the regionwere classified into feeder ports, direct ports, and hub ports as a result of applying the external costapproach. Policy makers could track the findings with helpful guidance on ways to strengthen the

logistics capability of the PRD region whilereducing the environmental harm fromshipping activities. The reduction in externalcost represents reduced socio-environmentaldamage caused by container shippingactivities. Since the external cost of bargeswas much lower than that of containerships,the findings suggested that the overall externalcost in the PRD region could be reduced byusing barges to tranship containers fromfeeder ports to hub ports. By choosing theshortest equivalent containership distance andhence the lowest external cost of transport,

three green shipping networks were identified.

ThreeThreeThreeThree greengreengreengreen shippingshippingshippingshipping networksnetworksnetworksnetworks identifiedidentifiedidentifiedidentified bybybyby thethethethe studystudystudystudy

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METHODOLOGY: Using the external cost ofcontainerships and barges to evaluate and analyse theenvironmental impact caused by container traffic in thePRD region, adopting the “benefit transfer” approach toestimate the external costs for different transport modesbased on the data provided by the EuropeanCommission to estimate the benefits of developinggreen shipping hubs in the PRD regions.Four key container ports in the PRD region are theports of Hong Kong (HK), Yantian (YT), Chiwan(CW), and Shekou (SK).

(Source: Lun, Lai and Cheng 2013)

For Asia-Europe trade originating from Yantian, use the route via Hong Kong to Europe destinations,

For Trans-Pacific trade to the west coast of the USA originating from Shekou and Chiwan, an alternative tothis route is to transship containers via Hong Kong,

For Trans-Pacific trade to the east coast of the USA originating from Hong Kong, Shekou and Chiwan,results suggest developing a green shipping hub in Yantian to handle containers to the east coast of the USA.

(Source: Lun, Lai and Cheng, 2013)

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ESPITE the need for environmental management in shipping, there is no existing measurementscale that comprehensively captures

green shipping practices in shippingoperations according to Lai et al. (2013a). Inview of this, the authors investigated the construct of and developed a measurement scale forevaluating GSP implementation in the shipping industry. Based on conceptualisation of GSP in anearlier study and survey data collected from 107 shipping firms, a six-dimensional GSP measurementscale was developed, refined, and tested specifically for evaluating GSP implementation in the seatransportation context. The implementation of GSP was evaluated by first-and second-order levels andvalidated by confirmatory factor analysis (CFA).

To investigate how green practices on shipping design for compliance (SDC) is related to shippingfirms’ financial and service performance, how company policy and procedure as well as shippercooperation differentiates the performance outcomes of shipping firms in their SDC for environmentalmanagement, interested readers could refer to the latest study regarding green shipping practices byLai et al. (2013b).

TheTheTheThe aforementionedaforementionedaforementionedaforementioned greengreengreengreen practicespracticespracticespractices areareareare particularlyparticularlyparticularlyparticularly aimingaimingaimingaiming atatatat thethethethe shippingshippingshippingshipping firms,firms,firms,firms, whilewhilewhilewhilegreeninggreeninggreeninggreening marinemarinemarinemarine environmentenvironmentenvironmentenvironment wouldwouldwouldwould notnotnotnot progressprogressprogressprogress withoutwithoutwithoutwithout effortseffortseffortsefforts fromfromfromfrom portsportsportsports managers.managers.managers.managers.

he prevention of air emissions from shipping is the most controversial topic in the maritimesociety due to its contribution to reducing greenhouse gas emissions. Reducing emissions from

ships in port may greatly and immediately benefit local residents in the port environment. Homsombatet al. (2013) studied the regional administration of ports and examined the managerial and policyimplications of a pollution tax for port environmental protection and social welfare improvement. Thespillover effects of air emissions from one port to another have been incorporated into their spatialgame models, which assume that there are a number of symmetric shipping lines at the two ports inthe framework of Cournot competition. The decision variable is the local emission taxation totrade-off port production against local and regional ship emissions. The impact of a pollution tax onthe spillover effects is investigated. Effective regional cooperation of pollution taxation is found togreatly reduce shipping emissions at ports.

InInInIn conclusionconclusionconclusionconclusion,,,, thisthisthisthis collectioncollectioncollectioncollection ofofofof paperspaperspaperspapers havehavehavehave addressedaddressedaddressedaddressed contemporarycontemporarycontemporarycontemporary maritimemaritimemaritimemaritime issuesissuesissuesissues suchsuchsuchsuch asasasasportportportport safetysafetysafetysafety andandandand thethethethe environmentenvironmentenvironmentenvironment managementmanagementmanagementmanagement whilstwhilstwhilstwhilst consideringconsideringconsideringconsidering thethethethe implicationsimplicationsimplicationsimplications totototo thethethetheinvolvedinvolvedinvolvedinvolved multi-parties.multi-parties.multi-parties.multi-parties. ItItItIt isisisis expectedexpectedexpectedexpected thatthatthatthat moremoremoremore researchresearchresearchresearch aroundaroundaroundaround thesethesethesethese topicstopicstopicstopics willwillwillwill bebebebe conductedconductedconductedconductedinininin thethethethe futurefuturefuturefuture....

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MMMMeasureseasureseasureseasures forforforfor evaluatingevaluatingevaluatingevaluating greengreengreengreen shippingshippingshippingshippingpracticespracticespracticespractices implementationimplementationimplementationimplementation

FINDINGS: Assessed the construct of GSP implementation by providing a validated 30-item measurementscale for the practical use of shipping firms to evaluate the different facets of environment-based shippingpractices. The empirical results suggest that all the 30 measurement items are critical attributes of the sixunderlying factors of GSP implementation. The validated GSP construct and the measurement scale provideassessment tools for shipping firms to assess and identify deficiencies in their GSP implementation that callfor improvement actions. Shipping firms can use the evaluation results obtained from using the tools to plantheir assessment, reporting, and monitoring mechanisms for GSP implementation.

(Source: Lai et al. 2013a)

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RemarksRemarksRemarksRemarks

Maritime security

According to Wikipedia, maritime security was concerned with the prevention of intentional damage throughsabotage, subversion, or terrorism. Maritime security is one of the three basic roles of the United States CoastGuard has gradually developed in response to a series of catastrophic events, which began in 1917.

(Source: Wikipedia)

Marine safety

The Coast Guard performs its marine safety mission by conducting marine inspection, marine investigation,waterways management, port safety, and merchant mariner credentialing activities. The marine safety missionis the largest mission performed by Prevention Departments at U.S. Coast Guard Sectors. U.S. Coast Guardpersonnel that contribute to the marine safety program at field units are eligible to earn the Marine SafetyInsignia.

(Source: Wikipedia)

Port disruption

Port disruption is an event that causes a sudden interruption on material or product flow in a supply chain,leading to a halt in movement of cargoes.

(Source: Wilson, 2007)

ReferencesReferencesReferencesReferences

Gurning, S., and Cahoon, S. (2011). Analysis of multi-mitigation scenarios on maritime disruptions. Maritime Policy and Management,38(3), 251-268.

Homsombat, W., Yip, T. L., Yang, H. and Fu, X. W. (2013). Regional cooperation and management of port pollution. Maritime Policy andManagement, forthcoming.

Lai, K-H., Lun, Y.H.V., Wong, C.W.Y. and Cheng T.C.E. (2011). Green shipping practices in the shipping industry: Conceptualization,adoption, and implications. Resources, Conservation and Recycling, 55(6), 631-638.

Lai, K-H., Lun, Y.H.V., Wong, C.W.Y. and Cheng, T.C.E. (2013a). Measures for evaluating green shipping practices implementation.International Journal of Shipping and Transport Logistics, 5(2), 217-235.

Lai, K-H., Wong, C.W.Y., Lun, Y.H.V. and Cheng, T.C.E. (2013b). Shipping design for compliance and the performance contingencies forshipping firms. Transportation Research Part E, 55, 74-83.

Lam, J.S.L., and Yip, T.L. (2012). Impact of port disruption on supply chains: a Petri Net approach. H. Hu et al. (Eds.): ICCL 2012, LectureNotes on Computer Science, 7555, 72-85.

Lu, C.S., Lai, K.H., Lun, Y.H. and Cheng, T.C.E. (2012). Effects of national culture on human failures in container shipping: Themoderating role of Confucian dynamism. Accident Analysis and Prevention, 49, 457-469.

Lun, Y.H.V., Lai, K-H., Cheng, T.C.E. (2013). An evaluation of green shipping networks to minimize external cost in the Pearl River Deltaregion. Technological Forecasting & Social Change, 80(2), 320-328.

Wilson, M.C. (2007). The impact of transportation disruptions on supply chain performance. Transportation Research Part E, 43(4),295-320.

Wong, M.C., and Yip, T.L. (2012). Maritime piracy: an analysis of attacks and violence. International Journal of Shipping and TransportLogistics, 4(4), 306-322.

Yip, T.L. (2008). Port traffic risks - A study of accidents in Hong Kong waters. Transportation Research Part E, 44(5), 921-931.

Yip, T. L., Fu X., and Ng, A.K.Y. (2012) (eds). Proceedings of the International Forum on Shipping, Ports and Airports (IFSPA) 2012,Transport Logistics for Sustainable Growth at a New Level. Hong Kong. ISBN: 978-962-367-757-8

Zurawski, R., and Zhou, M. (1994). Petri Nets and industrial applications: A tutorial. IEEE Transaction on Industrial Electronics, 41(6),567-583.

The definition of Wikipedia for Maritime security, http://en.wikipedia.org/wiki/Maritime_security_(USCG) (Accessed on May 27 2013).

The definition of Wikipedia for Marine Safety, http://en.wikipedia.org/wiki/Marine_safety (Accessed on May 27 2013).

The introduction of Wikipedia for Carl Adam Petri, http://en.wikipedia.org/wiki/Carl_Adam_Petri (Accessed on May 27 2013).

The introduction of the Shipping Research Centre, http://www.lms.polyu.edu.hk/en/centres/src (Accessed on May 27 2013).

C.Y.C.Y.C.Y.C.Y. TungTungTungTung InternationalInternationalInternationalInternational CentreCentreCentreCentre forforforfor MaritimeMaritimeMaritimeMaritime StudiesStudiesStudiesStudies

MaritimeMaritimeMaritimeMaritime Education | Research | Consultancy

Editors: Dr Xinyu Sun, Miss Fang Zhang

4/F, CD WingVia Department of Logistics and Maritime Studies

The Hong Kong Polytechnic UniversityHung Hom, Kowloon, Hong Kong

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